Banks take over leading Spanish property group
MADRID – Troubled Spanish property developer Metrovacesa announced Thursday its creditor banks have agreed to assume its debts in exchange for a majority stake in the group.
The Sanahuja family, which holds 80.62 percent of Metrovacesa, reached a deal "on the partial restructuring of its financial debt" which would see its creditors control 54.75 percent of the company.
Each of the banks will also buy 1.78 percent from other shareholders, to bring their total holdings to 65.40 percent.
The main creditor banks are Santander, BBVA, Caja Madrid, La Caixa, Banco Popular and Banco Popular Espanol.
The Sanahuja family assumed EUR 4 billion in debt when it bought out other shareholders two years ago following a boardroom row that forced a split in Metrovacesa.
Metrovacesa, once the largest developer in the eurozone, has assets across Europe worth a total of EUR 12 billion, according to its website.
Last Friday, it offered to sell its largest single asset, the 45-story London headquarters of HSBC, back to HSBC for 838 million pounds. It bought the building from the bank in April 2007 for GDP 1.1 billion (EUR 1.27 billion).
The company is the latest heavily indebted Spanish property developer to offer stakes in itself to creditor banks in an attempt to stave off collapse.
After a decade-long boom, Spain’s property market began to slump in 2007 due to rising interest rates, oversupply and tougher lending conditions introduced in the wake of the global credit crunch.
The collapse in the property sector has helped push the Spanish economy to the brink of recession and it lifted the unemployment rate to 12.8 percent in November, according to European Union statistics office Eurostat.
[AFP / Expatica]